Guwahati: The Supreme Court of India on Thursday stayed all ongoing investigations by the Directorate of Enforcement (ED) into alleged irregularities at Tamil Nadu’s state-run liquor distribution arm, the Tamil Nadu State Marketing Corporation (TASMAC).
A bench comprising Chief Justice of India B.R. Gavai and Justice A.G. Masih severely reprimanded the ED, stating the central agency had been “crossing all limits” in its recent investigations.
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The apex court issued a notice to the ED on a Special Leave Petition (SLP) filed by TASMAC.
The petition challenged an April 23 order by the Madras High Court, which had dismissed pleas by the state and TASMAC seeking to declare as illegal the ED’s search and seizure operation at the corporation’s Chennai headquarters from March 6 to 8, 2025, in connection with a money laundering case.
During the hearing, the Supreme Court bench orally questioned the legality of the ED’s actions, particularly its decision to register a case directly against a corporation.
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“How can you register a case against a corporation? You may register against individuals, but how against a corporation?” the bench asked Additional Solicitor General (ASG) S.V. Raju, who represented the ED.
The court further noted that while the ED had registered FIRs against several high-ranking TASMAC officials, it remained silent on the “predicate offence” – the underlying crime that would allow for a money laundering probe. “Where is the predicate offence?” the bench pressed.
When ASG Raju asserted that the predicate offence was an alleged multi-crore money laundering case and that the ED had done “nothing wrong,” the bench intervened, emphasizing that the ED had recently been overreaching its powers.
“We are saying this again. Your ED has been crossing all limits, Mr. Raju,” the Court stated unequivocally.
Senior advocates Kapil Sibal and Mukul Rohatgi, representing TASMAC and its employees, argued that the ED had overstepped its mandate by cloning mobile phones and seizing personal devices without due process.
While Rohatgi stressed the importance of privacy, Sibal urged the court to ensure the non-use of any data extracted from those devices.
This Supreme Court intervention follows an earlier instance last month where the apex court had declined the Tamil Nadu government’s plea to transfer the case related to the ED’s raid on TASMAC from the Madras High Court. The High Court, in turn, had criticized the state for “insulting” the judiciary and accused it of “forum shopping.”